Selecting an order processing network

As catalog orders continue to come in and be fulfilled through a variety of sources-telephone, fax, the Internet, intranets-smooth order processing will be even more important to good customer service and a successful business. n This means catalogers will need an order processing network-an inhouse or outsourced infrastructure with the means to manage every order placed through any channel, and to track orders through their life cycles.

This type of network can also help marketers better target customers and provide high levels of service by gathering customer buying profiles and setting up an intelligent customer relationship manager. For instance, such a system can send cards to buyers or alert customers when their favorite products go on sale. Such reminders are commonly generated via e-mail over the Internet, but catalogers can set up programs to communicate notices to customers via postcards, outbound calls, or faxes.

Order processing networks can also connect catalogers to their business partners. For example, co-op inflight cataloger SkyMall uses an order processing network to offer partner Continental Airlines a corporate intranet, through which Continental Airlines employees can shop for SkyMall’s catalog products. On the logistics side, its order processing network acts as a consolidation point and makes it possible for SkyMall to connect to its more than 80 merchandise suppliers and fulfillers through all its sales channels.

But while order processing networks provide a world of services and advantages, selecting the right network or network provider can be complicated. Some catalogers deal with only one order processor; others may be connected to many-perhaps to four fulfillers, two payment processors, a list management service, and a fraud-screening service provider. If you’re connected to four drop-shippers, each order would have to be split up into suborders and then routed to the fulfillers-and then the payment information would have to get to the correct payment processor. You would then have to ensure that the orders did indeed get to the fulfillers and were shipped to the customers on time, that the deposit information got to the payment processor, and that the correct information was sent to the list processor in regard to who bought what and where the orders came from.

Managing fulfillment relationships with multiple suppliers, then, can be a technological nightmare for catalogers. In such an instance, signing on with an outside order processing network would make sense. The network supplier would make the connections, merge all the details, and get the orders and information to the right partners. To determine what kind of order processing network is best for you, let’s first review the order fulfillment process.

Inhouse versus outsource Catalog orders in general can be divided into two major categories: simple, if you deal with only one or two sources for order fulfillment; and complex, if you have more than two fulfillers. The complexity has to do with updating, maintaining, and reporting order status at any time in the order life cycle.

You also have to take into account that each fulfiller has its own format for the order form that it will accept. The costs of managing these relationships, certifying that the connection with each party works, and ensuring that orders are received when sent, statuses are actually updated, and notifications are sent out on a timely basis can add up quickly. These multiple connections to fulfillers may increase the opportunity for sales and profits, but they can also increase the chances for problems.

If you want to manage the order processing inhouse, some of the newer commerce servers have all of the necessary routing functionality built in. Microsoft Site Server, for instance, has the capability to output a defined message format to multiple fulfillers with one connection. Still, you’ll have to get all your fulfillers to agree to use just one or two file formats. And this capability does not address the issues of maintaining connectivity and managing operations and relationships on a day-to-day basis, not to mention the complexity of managing any changes if any of the involved parties should upgrade or change their platforms, formats, or protocols.

The concept of an outside order processing network is still relatively new. It works like this: A catalog that maintains connectivity to multiple fulfillers, payment processors, merchants, and other service suppliers pays a one-time implementation fee to connect to an order processing network. This one connection allows the cataloger to send and receive orders and order status, payment, and other information to and from any other endpoint on that network using existing systems, without any additional development effort.

The network supplier provides the software, hardware, and staff to man the network 24 hours a day. The network supplier also takes care of the details of connecting to multiple suppliers, mapping various formats into one another, and ensuring that information is moved at the right time and to the correct place.

Hooking up with a network service supplier should not take more than a few weeks. Implementation fees generally range from $5,000 to $20,000, depending on the systems and infrastructure a cataloger has in place already. Catalogers then typically pay for service on an as-needed or per-transaction basis.

What to look for in a supplier Of course, the success of your Web-based ordering network will depend on your relationship with your supplier. When looking for a Web ordering service supplier, here are a few things to keep in mind:

* Check the number of connections. How many other catalogs, merchants, payment processors, and service suppliers are connected to the network? The number of people with whom you gain connection is a critical figure for comparisons.

* Note the routing abilities. What kind of routing services can the company provide? For instance, can the system route orders by SKU, line item, and vendor code?

* Review update capability. Does the system allow you to update the status of orders and line items, and if so, how frequently? The ability to trace any order or line item quickly can be a powerful customer service tool for your organization.

* Look for easy access. How will your customer service reps access the order status information? Will they have a user interface of some sort? Will it be Web-based? Or will your technical people have to do some programming before these capabilities are available to you?

Also, can the service provider automatically send consumer and merchant notifications for various events, such as “order shipped”?

* Confirm transaction volume and growth capability. How many transactions per day and month can the company process? This number should be at least in the millions per day.

You should also make a note of how scaleable the network’s architecture is. You don’t want to be limited as your volume grows because the network needs to reengineer its infrastructure to keep up.

* Look for service-enhancing extras. Can the network supplier handle loyalty programs to help you retain your good customers, for example, and can it filter out your bad customers with features such as fraud screening?

* Check connectivity options. How will you and your suppliers communicate with the system supplier? A good order processing network should allow connectivity through a number of online and batch methods, such as transmission control protocol (TCP), file transfer protocol (FTP), and e-mail.

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